The Treasury did a surprise update of TreasuryDirect with the new May I Bond and EE Bond rates on Friday morning. In the past, the Treasury has typically updated the rates on the first business day of the month. The new rate, applying for the next six months, is 4.3%, down from 6.89%, due to lower inflation.
The new rate leaked early via the Treasury website, once sales closed for the 6.89% rate of the prior six months. This caused confusion and concern among investors who were caught off guard by the sudden change.
Looking to hedge against inflation? Time is running out to buy I bonds at their current interest rate, which will likely drop next month. The interest rate on I bonds is now 4.3%, down from 6.89%, the Treasury Department said Friday. The new rate will apply to I bonds purchased from May 2021 to October 2021.
Series I bonds will offer lower returns for the next six months, reflecting cooling inflation. The inflation-linked securities offer a tax-advantaged way to prepare for your child's future. RF I bonds Savings Bond Treasury. Despite the drop in interest rates, I bonds remain a popular investment choice for those looking to protect against inflation and diversify their portfolio.
You can buy I bonds through April 27 and score an attractive interest rate of 6.89%. But depending on your timeline and predictions about future inflation, it may be wise to hold off on purchasing until after the new rates take effect.
The new fixed rate for I-bonds issued May-October 2023 is 0.9%. 0.9% is the highest fixed rate in 16 years. This may be a better option for investors looking for stability and a guaranteed return.
Investors should also note that I bonds must be held for at least one year before they can be redeemed. If you need access to your funds before then, you may want to consider other investment options.
In addition to the drop in interest rates, the Treasury also announced changes to the bond buying process. Starting in May, investors will be limited to purchasing $10,000 worth of I bonds per calendar year, down from the current limit of $10,000 per series per year.
Overall, the drop in I bond interest rates may be disappointing for some investors, but it is important to remember that these bonds are designed to protect against inflation and provide a stable, long-term investment option. It is always wise to consult with a financial advisor before making any investment decisions.
Ticker: None
